Decent gains ahead in Coal India stock as power demand picks up

With business conditions improving, analysts expect 15-20% upside in share price of India's largest coal miner

There’s been a lot of action in the power sector, especially in merchant power with the power exchanges booking short-term units at higher rates. Greater power demand is a sign of ongoing recovery.

That must be backed up by adequate coal supplies since close to 70 per cent of power is from thermal units. The key coal supplier is Coal India (CIL), which along with its subsidiaries, has a near-monopoly, apart from captive mines awarded at auctions to units in the power and steel sectors.

Recent reports indicate 41 thermal units have less than 7 days of coal stock (as